The committee representing customers affected by the Celsius bankruptcy mission statement It is calling for further investigation into CEO Alex Mashinski for misleading the public.
Unsecured creditors of Celsius formed a group on July 27th, consisting of five individuals and two entities. Including Covario AG, a Zug-based crypto prime broker, is fighting for a quick recovery of the funds.
The Commission accused Celsius CEO in its statement Alex Mashinski suspected of promoting misleading information before declaring bankruptcy. Through his public videos and messages, Mashinsky was reportedly promising customers that their funds were safe.
All funds are safe.We are still open for business as usual
As part of our responsibility to serve our community, @CelsiusNetwork We implement and adhere to a robust risk management framework to ensure the safety and security of assets on our platform.
— Alex Mashinsky (@Mashinsky) May 11, 2022
However, his claims were proven false on June 12, when Celsius suspended all withdrawals citing “extreme market conditions.” A month later he filed for Chapter 11 bankruptcy.
The Commission shall Advised by law firm White & Case, it enlisted M3 Partners, Perella Weinberg Partners, and blockchain analytics unit Elementis as restructuring advisors to assist with the ongoing investigation.
According to the statement:
“The Commission is ready to work day and night to protect the rights of voters harmed by Celsius’ ill-considered decisions, and is carrying out the tasks that lie ahead of it.”
The DFPI follows the Celsius “earning program”.
On August 8, the Department of Financial Protection and Innovation (DFPI) issued A “suspension order” has been ordered against Celsius for allegedly providing cryptocurrency interest rate accounts to customers without proper registration.
Celsius and its CEO Alex Mashinski have been accused of providing misleading information about the risks associated with making deposits in interest-bearing “earning programs.” DFPI also accused Celsius of failing to explain that in the case of sudden withdrawal requests, it may not be able to meet all customer requests on time.
According to DFPI, Earn Rewards accounts offered and sold by Celsius are securities in the form of investment contracts and must be registered with the Securities Act.
DFPI has set up a public complaint form to receive feedback from customers affected by the Celsius withdrawal freeze as it seeks to accelerate its investigation.
